Dec. 3 (Bloomberg) -- The phrase information overload has taken on new meaning.

Last weekend WikiLeaks.org released about 250,000 classified U.S. State Department cables. Within days the collective American brain was challenged by another info-dump. On Wednesday, the Federal Reserve posted the details of more than 21,000 of its transactions with financial firms and other businesses during the financial crisis, in an unprecedented move required by the new Dodd-Frank law overhauling financial regulation.

The first question prompted by this document flood is whether releasing such previously unavailable information is right or wrong. Most Americans probably feel unqualified to make this call. The second question, equally important, involves efficiency. How is this quantity of material to be sorted out, and does the old news industry still play a role in that work?

In 1971 Daniel Ellsberg needed the New York Times to disseminate the Pentagon Papers, a critical analysis of the Vietnam War. A short time later, Bob Woodward and Carl Bernstein needed the platform of the Washington Post to deliver a long, complex story like Watergate, and to give their combination of innuendo, surmise and fact a layer of legitimacy.

Today, it's different. If the contest is about the sheer volume of material, newspapers and magazines have already lost. The ocean of information that WikiLeaks and its heedless founder Julian Assange have released makes the 7,000 pages of the Pentagon Papers look like a New England pond. It turns out places without multilayer hierarchies, marketing departments or editorial picnics are able to find readers if their material is juicy.

Looking for Guideposts

There is a simple way to decide the matter of right and wrong. Disclosure is fine insofar as it is legal. It's time to respect the law and use it as a guidepost.

The original leak of cables was clearly illegal. The data allegedly flowed to WikiLeaks from Bradley Manning, a private in the U.S. Army, who is suspected of disseminating classified information. Criminal charges against Manning are likely to include violating Article 92 of the Uniform Code of Military Justice, which says that any soldier who "violates or fails to obey any lawful general order or regulation" shall be punished "as a court martial may direct." Manning may also be charged with violating Article 134, which covers "disorders and neglects to the prejudice of good order and discipline in the armed forces."

Assessing Damage

An efficient response is to assume those laws exist for a reason, and if Manning violated them, he should be punished. The guessing game about how much damage the leaks might cause was already evaluated, by the authors of such laws. And unless the guilty party -- Manning or someone else -- is convicted, copycat leaks are likely. Those leaks could contain damaging information, even if the current set of leaked cables don't.

Therefore, the perpetrator, whoever he is, deserves to be condemned. If Interpol or any other law enforcement institution can prove that Assange's WikiLeak activity is illegal, then he should face the consequences, too. The flamboyant Assange, though, is mere handmaiden to whoever leaked the material.

The Fed situation is different. The central bank, at least early on, wasn't any happier to disclose data than the State Department. Bloomberg News reporters sought for years, first through Freedom of Information Act requests, then through a lawsuit, to get the Fed to be more transparent about its bailout activities. Fed officials refused.

Changing the Rules

Meanwhile Congress passed the Dodd-Frank law in July, which mandates the Fed to disclose its decisions about whom to rescue, and how. The most unfortunate aspect of this provision is that it's retroactive. Those who received financial help assumed details of the transactions wouldn't be published. From now on, those who approach the Fed will know better.

Still, there is room for Congress to change the law. When it comes to the question of the old media's future, the law, or ethical culture in a larger sense, is also a good guideline.

Let's face it: Assange's arrogance recalls the less attractive side of Woodward and Bernstein. At times journalists of the post-Watergate investigative variety have used their own non-transparent, sometimes illicit, methods such as promises of anonymity and bullying to squeeze information out of officials. Crusading reporters justified their modus operandi by telling themselves that only they could deliver such valuable information.

Age of YouTube

It turns out that disgruntled servicemen or bank executives don't need newspapers. They don't even need WikiLeaks. All they need is YouTube.

The information flood doesn't necessarily doom news institutions. Having lost the race to the bottom to Assange and others, the news media will have to compete by adding value in a more dignified way, by honoring a more noble aspect of the "Woodstein" legacy. This includes using legal channels such as FOIA requests to enlighten.

The news industry's greatest advantage lies in its most experienced members. There is a certain kind of person who is able to efficiently sift through a flood of information, pulling out nuggets that matter and presenting them in a compelling way. That person is called an editor. Eventually his revival will be commanded, not by colleagues, but by the information-swamped market.

(Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.)